15/10/2008 - 11:55

Future projects under pressure: Paladin

15/10/2008 - 11:55

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Shares in Paladin Energy Ltd have dropped 16 per cent after the company said the global credit crisis will probably cause the deferral or cancellation of some planned uranium projects.

Shares in Paladin Energy Ltd have dropped 16 per cent after the company said the global credit crisis will probably cause the deferral or cancellation of some planned uranium projects.

In its September quarterly report, the Subiaco-based company said other companies planning future projects at the high end of the cost curve could experience some funding issues as banks tighten up the purse strings.

As a result, Paladin said the scenario "will only exacerbate the supply-demand imbalance in the future".

It noted that nuclear reactor construction and forward planning for new plants continued strongly in China and other Asian countries, as well as Russia,

"Demand for uranium in the medium to long term remains extremely strong," Paladin said.

The outlook could be seen as good news for the company which is mining uranium at its Langer Heinrich operation in Namibia and is currenlty developing its second mine, Kayelekera, in Malawi.

The company's comments come as the spot price of uranium fell $US3 to $US46 per pound, according to uranium specialists Ux Consulting.

The price fall is well off from highs reached a year ago of some $US138/lb.

During the September quarter, Paladin achieved nameplate production at Langer Heinrich mine, overcoming earlier problems with its processing plant.

The company produced 650,554 pounds of uranium oxide, equating to 2.6 million pounds on an annualised basis. Stage 1 nameplate capacity is 2.6mlbs each year.

Sales for the quarter were $US51 million comprising of 878,000lb uranium oxide sold at an average price of $US58/lb.

Shares in Paladin dropped 42c or 16 per cent to $2.18 at 14:45: AEDT

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